The long term objective of this program is to elucidate the pathogenesis of hepatocellular carcinoma (HCC) due to chronic hepatitis B virus (HBV) infection. To approach this objective the investigator has developed and partially characterized an HBV transgenic mouse model of HCC. In this model, the transgenic hepatocytes overexpress the HBV large envelope polypeptide, produce nonsecretable, filamentous subviral hepatitis B surface antigen (HBsAg) particles that accumulate in the endoplasmic reticulum (ER), that becomes progressively hyperplastic, and causes the formation of ground glass cells similar to those found in chronic HBV infection in man. At high concentrations, the retained subviral filaments are toxic to the hepatocytes, causing the ground glass cells to die by a process that includes apoptosis, and is accompanied by Kupffer cell activation, increased oxygen radical production, decreased antioxidant (catalase and glutathione) content, increased oxidative DNA damage, increased hepatocellular turnover rate, increased procarcinogenic phase I enzyme expression, and increased sensitivity to the transforming effects of hepatocarcinogens such as aflatoxin and diethylnitrosamine. Despite these changes, however, the investigator found no structural or functional abnormalities in a large panel of cellular protooncogenes, hepatocyte growth control genes or tumor suppressor genes in this model of HCC. Collectively, these observations lead to the speculation that the HBsAg positive ground glass hepatocyte may be especially susceptible to transformation because of the procarcinogenic consequences of its hyperplastic ER. In this context, the ground glass hepatocyte might be considered a preneoplastic cell. Although the inciting cause of disease in these transgenic mice is different from the presumed etiology of chronic hepatitis in man (T cell mediated destruction of infected hepatocytes), the downstream regenerative (mitogenic) and inflammatory (mutagenic) events are similar in the natural infection and transgenic mouse systems. The investigator proposes to gain further insight into the pathophysiological mechanisms of hepatocarcinogenesis in this model and to improve upon it by developing a new model that more closely approximates the initiating immunological events thought to contribute to hepatocarcinogenesis in patients with chronic hepatitis. The Specific Aims are 1. To examine the procarcinogenic effect of HBsAg retention in the endoplasmic reticulum; 2. To examine the role of hepatocellular apoptosis and oxidative DNA damage in hepatocarcinogenesis in this model; 3. To examine the role of inflammatory cells and inflammatory cytokines on hepatocarcinogenesis in this model; 4. To examine the influence of host genetic background on hepatocarcinogenesis due to expression of HBsAg and other HBV proteins; 5. To establish a model of immunologically mediated chronic active hepatitis and to determine whether it leads to the development of HCC.